Come now the Petitioners, James L. and Barbara A. Puckett (the Pucketts), and
file a Petition for Rehearing pursuant to Indiana Appellate Rules 54 and 63.
In their Petition, the Pucketts challenge this Courts holding in James L.
& Barbara A. Puckett v. Department of Local Government Finance, No. 49T10-9910-TA-206, slip
op. (Ind. Tax Ct. July 22, 2003). Having reviewed the Pucketts Petition
and having held a hearing thereon, the Court now GRANTS the Pucketts Petition
in part.

FACTS AND PROCEDURAL HISTORY

The Pucketts own several warehouses in Columbus Township, Bartholomew County, Indiana. For
the 1997 tax year, the Pucketts warehouses were assessed as mini-warehouses under the
General Commercial Industrial (GCI) cost schedule.
The Pucketts challenged the assessment, first with the local assessing authorities and then
with the State Board of Tax Commissioners (State Board). Throughout the appeal
process, the Pucketts argued that because their warehouses were pole buildings, they should
have been valued under the General Commercial Kit (GCK) cost schedule. In
the alternative, the Pucketts argued that under the current pricing (i.e., GCI pricing),
the warehouses grade factor should be reduced from a D to an E.
Neither the local assessing officials, nor the State Board, awarded the
Pucketts any relief on their appeal. Consequently, the Pucketts filed an original
tax appeal with this Court on October 20, 1999. After conducting trial
and oral argument, this Court issued an opinion in which it affirmed the
State Boards final determination. Puckett, slip. op. at 5. More specifically,
the Court determined that the Pucketts did not submit any evidence to show
that their warehouses qualified for GCK pricing. Id. at 4. Furthermore,
the Court did not address the Pucketts grade issue, as it determined that
the Pucketts waived the issue at the administrative hearing. Id. at n.5.
On August 21, 2003, the Pucketts filed a Petition for Rehearing. The
Court held a hearing on the Pucketts Petition on October 7, 2003.
Additional facts will be provided as necessary.

ANALYSIS & ORDER

In their Petition, the Pucketts argue that the Courts decision was erroneous because
it incorrectly determined that the Pucketts waived the grade issue at the administrative
hearing. (Petrs Pet. for Rehg at 1.) The Pucketts are correct.
After reviewing the administrative record in this case again, the Court finds the
following discussion, between the Pucketts property tax consultant Milo Smith and State Board
hearing officer Kay Schwade, persuasive that the Pucketts did not waive their grade
issue at the hearing:
[Milo] Smith: Okay. Items number 3
See footnote
and 5 are addressed in
issue number 2 above, and I can either withdraw those or just make
that statement. Probably be easier . . . but issue number 4,
I dont have any evidence to submit about negative partitioning adjustment. Therefore,
I can either withdraw it or just say I dont have any evidence.
What would you prefer? If I --

[Kay] Schwade: Would you just withdraw it?

Smith: Ill just withdraw it then. And I can withdraw issues
3 and 5 as well, but what Im saying is theyre addressed in
issue number 2 above, so theres no reason for me to address them
twice. Okay?

Schwade: Okay.

(Cert. Admin. R. at 149 (footnote inserted).) Later, during the hearing, grade
was discussed numerous times. (See Cert. Admin. R. at 150-153, 156-57.)
It is clear from the record that the Pucketts did not waive the
issue of grade. Rather, the Pucketts representative, Milo Smith, having presented testimony
and evidence regarding grade in conjunction with his presentation on issue two (square
foot pricing), merely intended that he not present the evidence twice. Accordingly,
because the Court erred in not addressing the Pucketts grade issue on appeal,
it does so now.

Grade

The Pucketts allege that the State Board erred in grading their warehouses.
More specifically, the Pucketts argue that even if the warehouses do not qualify
for the kit building pricing under the GCK schedule, they are, nonetheless, low-cost,
pre-engineered buildings. As a result, the Pucketts contend that the State Board
should have graded the warehouses with an E grade instead of a D
grade. See King Indus. Corp. v. State Bd. of Tax Commrs, 699
N.E.2d 338, 340-41 (Ind. Tax Ct. 1998) (stating that if a pre-engineered building
does not qualify for a kit adjustment, i.e., GCK pricing, the assessor may
apply a lower grade and design factor to account for the lower cost
of construction).
Pursuant to the State Boards regulations, improvements are assigned various grades based on
their materials, design, and workmanship. Ind. Admin. Code tit. 50, r. 2.2-10-3;
Whitley Prods., Inc. v. State Bd. of Tax Commrs, 704 N.E.2d 1113, 1116
(Ind. Tax Ct. 1998), review denied. In determining grade, the assessor must
distinguish significant variations [in an improvements] quality and design. Ind. Admin. Code
tit. 50, r. 2.2-10-3(a). The State Boards regulations define the different characteristics
that help assessors differentiate between grades. For instance, D grade buildings are
constructed with economy materials and fair workmanship. These buildings are devoid of
architectural treatment and have a substandard quality interior finish . . . electrical
and plumbing fixtures, and . . . heating system. Ind. Admin. Code
tit. 50, r. 2.2-10-3(a)(4). On the other hand, E grade buildings are
constructed with sub-standard grade materials . . . and very poor quality workmanship
resulting from unskilled, inexperienced, do-it-yourself labor. They have low grade mechanical features
and fixtures. Ind. Admin. Code tit. 50, r. 2.2-10-3(a)(5).
The Pucketts bear the burden of proof on the
grade issue and must offer probative evidence concerning the alleged grading error.
See Clark v. State Bd. of Tax Commrs, 694 N.E.2d 1230, 1233 (Ind.
Tax Ct. 1998); Miller Structures, Inc. v. State Bd. of Tax Commrs, 748
N.E.2d 943, 947 (Ind. Tax Ct. 2001). During the administrative hearing, the
Pucketts presented their federal tax depreciation report indicating that their warehouses had an
actual cost basis totaling $380,462. The Pucketts explained (by way of Milo
Smith) that because the base prices contained within the State Boards regulations were
15% lower than the base prices used by Indiana businesses, the actual cost
basis needed to be adjusted by 85%. In turn, the resulting figure
of $323,546, was approximately 40% of the total reproduction cost ($806,357) assigned by
the State Board. The Pucketts contend that by reducing the grade on
the warehouses from a D to an E, the State Board could reduce
the total reproduction cost to be more in line with the actual cost
basis. (See Cert. Admin. R. at 72, 132, 134, 136-37.)
The Pucketts evidence is nothing more than a calculation supporting their conclusion that
the grade is this and it should be that. A taxpayers conclusory
statements do not constitute probative evidence concerning the grading of the subject improvement.
Sterling Mgmt.-Orchard Ridge Apartments v. State Bd. of Tax Commrs, 730 N.E.2d
828, 838 (Ind. Tax Ct. 2000). Instead, the Pucketts should have compared
the features of D and E grade improvements  as provided the State
Board regulations  with the features (or lack thereof) in their own improvements.
The Pucketts should have then attempted to calculate the value of the
features in the applicable models and translate that lack of value into a
grade adjustment. Because the Pucketts did not make the necessary comparisons, they
did not make a prima facie case that their warehouses were entitled to
an E grade.

Conclusion

Upon review and for the foregoing reasons, this Court GRANTS the Pucketts Petition
to the extent that the Court incorrectly determined that the Pucketts waived the
issue of grade at the administrative hearing. Nevertheless, upon reviewing the evidence
presented by the Pucketts at the administrative hearing regarding the issue of grade,
the Court finds that the Pucketts did not make a prima facie case
that they were entitled to their requested grade change. Accordingly, the Court
AFFIRMS the State Boards final determination.